easy · Investment Banking
What is the primary difference between Cash Accounting and Accrual Accounting regarding Revenue Recognition?
- Accrual recognizes revenue when cash is received; Cash recognizes it when earned
- Cash recognizes revenue when the transaction is earnable; Accrual recognizes it when realized
- Accrual recognizes revenue when it is earned and realized; Cash recognizes it only when cash hits the bank
- There is no difference in revenue recognition; the only difference is in how expenses are tracked
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